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Škoda Auto Group Generates Solid Earnings for 2022

In Automobile
March 18, 2023

MLADA BOLESLAV:
The Škoda Auto Group delivered 731,300 vehicles worldwide in 2022 and increased its revenues year-on-year by 18.5% to 21 billion euros (2021: 17.7 billion euros). The market environment remained challenging due to the ongoing semiconductor shortage, persisting supply chain issues and a substantial increase in raw material prices.

Thanks to effective countermeasures, the car manufacturer managed to achieve a positive operating profit amounting to 628 million euros (2021: 1.083 billion euros; -42%). This was attained despite the financial burden of extraordinary effects regarding the situation in Russia. The negative impacts related to the business in Russia were estimated at almost 700 million euros. Therefore, the return on sales without these extraordinary effects slightly exceeded last year’s 6.1%, but dropped to 3.0% including extraordinary effects. Despite the current challenges, Škoda continues to be financially sound, pushing the internationaliziation of the company and keeps investing heavily into electromobility and digitalization.

In 2022, several external factors impacted the company’s financial results: The sharp rise in the price of raw materials, the ongoing shortage of semiconductors and the financial burdens from the war in Ukraine made for a highly challenging market environment. Yet, thanks to efficient counter measures taking effect, the Škoda Auto Group1) was able to effectively mitigate the financial burdens.

Although the negative impacts related to the war in Ukraine and the extraordinary effects from the situation regarding Russia were estimated at almost 700 million euros, most of the key financial figures remain at a solid level.

The operating profit amounted to 628 million euros in the past fiscal year. Sales revenue in 2022 was significantly up on the previous year at 21 billion euros, (+18.5%). The return on sales remained positive at 3% while it fell by 3.1 percentage points, equally mirroring the financial hardships. The company managed to maintain a steady net cash flow at 489 million euros (2021: 554 million euros; -11.7%).

Klaus Zellmer, Škoda Auto CEO, says: “Against the backdrop of what is likely to have been the most challenging market environment in the company’s history to date, Škoda Auto achieved a very solid financial result and proved once more its extreme resilience. Many have contributed to the fact that we were able to steer through this challenging year well. A big “thank you” to the entire team of 45,000 Škodians for their passion and commitment, but also to our dealers and partners worldwide. Together, we kept the company on track to deliver as many cars to our customers as possible. In 2022, we delivered 731,300 vehicles and generated a solid operating profit of 628 million euros. And also thank you to our faithful customers for their trust and continuously strong interest in our products, that particularly applies to our Enyaq iV family: Its sales increased by 20% in 2022. Furthermore we are heavily investing in the future of our company and conquer promising new growth markets and regions like South-East Asia as well as India. We take the comprehensive measures to make sure that Škoda Auto emerges from the current upheaval even stronger.”

Christian Schenk, Škoda Auto Board Member for Finance and IT, adds: “We managed to increase our sales revenue by almost 20% year-on-year – despite comparatively low sales figures. The market is currently heavily distorted and the extraordinary effects from the situation regarding Russia negatively impacted our financial figures in the amount of almost 700 million euros. We effectively countersteered primarily with improvements in pricing, sales mix, and reinforcing the business in India. We also optimized fixed costs for production and administration whilst freeing up resources for the further transformation and future viability of the company. Between 2022 and 2027, we will invest significantly in electric mobility and comprehensively digitalise our vehicles throughout the entire user journey for example, including safety functions and connectivity. In order to achieve sound financial results and an ambitious Return on Sales target of more than 8% from 2025, the company has implemented the Next Level Efficiency+ Program from 2022.“

Future viability thanks to efficiency programme and extensive investments
The company is continuing to press ahead with the Škoda Next Level Efficiency+ programme. By 2027, the Czech carmaker has set aside 5.6 billion euros for the transformation towards electric mobility. In the same period, Škoda will invest a further 700 million euros in digitalisation and also forge ahead with the internationalization of the company.